Will Capex Take Over For The Consumer?
Ah, the thoughts of a new bull market are upon us. China is booming. India is booming. Global demand for American goods and services are expected to continue. The real estate slow down will be a soft landing. Hold on a minute. Someone is at the door. It's Goldilocks! The one and only Miss Goldilocks Economy. By the way, where'd she get that last name? Is she Greenspan's niece? She's carrying a box of chocolates and a bouquet of flowers as well. She said she just paid a visit to the Three Bears and they've called off the feud. Oh, how I wish that she would take my hand in life's long journey. Don't we all hope for Goldilocks as the commentators on CNBC do? As the Wall Street crowd does? Wish and hope will get you a buck and a Coke where I come from. (Aren't those Brothers Grimm Germanic fairy tales really uplifting? There's a real happy-go-lucky group of folks. Now you know where the word "grim" comes from. I'm allowed to make that joke because I'm of German origin.)
So, anyone ever hear how someone on CNBC or a financial advisor liked technology this cycle? Yeah, there were some technology companies that did "ok" this cycle but they were consumer focused. As a group, technology capex is a wreck. So much so people are actually telling you these companies will never perform again. Their day is over. Kaput. Too big. Too passe. Too yesterday. Too much competition. Freeeee software is taking over the world. So were you invested in technology or were you invested in energy, materials, developing markets, mortgage companies and homebuilders as you should have been? Did your advisor guide you using sound strategy? Does your advisor have a heartbeat? If you were in Microsoft, IBM, EMC, Oracle, SAP, Cisco and other dogs this cycle at the advice of a professional, you need another professional.
Europe and Asia have far outspent the US in percentage terms for investment this cycle. Why? Because they lagged in the late 1990s when the entire world was investing in the US. What if I told you information technology in the US has been in a recession or worse since 2000 and only global fiscal stimulus saved it from a total collapse? That without demand from Asia and Europe, these company's stocks would be even closer to zero? You wouldn't believe it would you? Have you seen the technology capex numbers this cycle? Recently? Marvelous aren't they? What about all of that cash on hand? How come its not being invested in capex? Because in a recession there is less demand for dollars. Why do you think mergers and acquisitions has been so good this cycle? Because capex spending is in the tank. Companies are better off buying their competitors than investing in capex. After looking at the chart I post tomorrow, would you possibly believe me? Goldilocks left the party six years ago.
So, anyone ever hear how someone on CNBC or a financial advisor liked technology this cycle? Yeah, there were some technology companies that did "ok" this cycle but they were consumer focused. As a group, technology capex is a wreck. So much so people are actually telling you these companies will never perform again. Their day is over. Kaput. Too big. Too passe. Too yesterday. Too much competition. Freeeee software is taking over the world. So were you invested in technology or were you invested in energy, materials, developing markets, mortgage companies and homebuilders as you should have been? Did your advisor guide you using sound strategy? Does your advisor have a heartbeat? If you were in Microsoft, IBM, EMC, Oracle, SAP, Cisco and other dogs this cycle at the advice of a professional, you need another professional.
Europe and Asia have far outspent the US in percentage terms for investment this cycle. Why? Because they lagged in the late 1990s when the entire world was investing in the US. What if I told you information technology in the US has been in a recession or worse since 2000 and only global fiscal stimulus saved it from a total collapse? That without demand from Asia and Europe, these company's stocks would be even closer to zero? You wouldn't believe it would you? Have you seen the technology capex numbers this cycle? Recently? Marvelous aren't they? What about all of that cash on hand? How come its not being invested in capex? Because in a recession there is less demand for dollars. Why do you think mergers and acquisitions has been so good this cycle? Because capex spending is in the tank. Companies are better off buying their competitors than investing in capex. After looking at the chart I post tomorrow, would you possibly believe me? Goldilocks left the party six years ago.
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